The Twin Arrows Navajo Casino Resort is working on an agreement with the Navajo Nation to postpone paying down its debt until business picks up at the 6-month-old enterprise.
Its owner, the Navajo Nation Gaming Enterprise, is a for-profit enterprise of the tribal government, and it borrowed money from the tribe to build the $200 million facility.
“We’re finalizing and putting together a temporary agreement to get us past this year and get us into the first quarter of next year,” said Twin Arrows CEO Derrick Watchman. “It provides a temporary solution to the outstanding liability we have with the Nation.”
Watchman is also the CEO of the Navajo Nation Gaming Enterprise, which runs all of the tribe’s casinos. He says that, overall, gaming is profitable for the tribe, but Twin Arrows needs more time.
Whereas the other casinos opened up to crowds of gamblers, Twin Arrows has had a surprisingly weak start. On a recent weekend at the casino, the crowds were sparse and most of the card tables and slot machines were empty.
As a result, employees have complained about the slow business eating away at their ability to earn tips.
The CEO said much of the problem was in marketing. The casino has hired a new marketing company and says it will begin a more aggressive campaign of TV and print advertising.
Although the casino sits alongside of Interstate 40, Coconino County laws stopped them from putting up significant signage off casino property. That was remedied several weeks ago when Twin Arrows erected a massive electronic billboard to announce itself to interstate travelers.
Low-rate hotel rooms and meals have also helped draw in traffic.
Over the summer, the casino’s average traffic was about 1,000 people a day, Watchman said. That number is now up to about 2,500, he says.
Twin Arrows also expects to benefit from recent agreements with online hotel booking websites, which make their rooms pop up when visitors search for Flagstaff.
But even that hasn’t been without its struggles, as companies like Expedia have to navigate entering into contracts with a sovereign government with its own laws.
“Admittedly, it’s taking (Twin Arrows) a lot longer to become a recognizable name in the Flagstaff market versus (other Navajo casinos) in New Mexico,” Watchman said. “It was a surprise. This is just a different market. I learned I can’t assume the markets are the same. I have three distinct markets.”
However, he said Twin Arrows has two obligations — to provide jobs to the tribe and bring in revenue. It’s already meeting the first goal with full staffing. There are no plans to furlough workers, lay them off or reduce shifts, despite the shortfall of revenue, he said.
The Navajo Nation is also looking to improve business at Twin Arrows by doubling down and adding shopping centers and entertainment on an adjacent 40-acre plot they acquired. Building plans on file with the county show a longterm development called “The Outlook at Glittering Mountain,” that includes a golf course, laser tag course, an artists’ village, a movie theater, condos and much more.
The Hopi Tribe has also purchased a large tract of land on the south side of Interstate 40 from a family of ranchers.
In a memo sent to CEOs of other tribal enterprises earlier this summer, Watchman suggested buying additional property for the Navajo Nation on the south side of the interstate.
The CEO said that the Navajo Nation has approval from the state of Arizona for 2,400 slot machines and only has 1,089 at Twin Arrows right now. He expects that the western portion of the Navajo Nation could benefit from those slot machines in places other than Twin Arrows as Navajo Gaming eventually expands in Arizona.
Early studies by Navajo Gaming indicated that in addition to Flagstaff, LeChee, Tuba City, Kayenta and Sanders could be possible sites.
In the near term, a gas station and convenience store being built by Navajo Nation Oil and Gas is expected to be completed at Twin Arrows by March, according to tribal officials. Tribal officials say that the Chevron station will draw more traffic to the casino.
That Chevron was put on hold temporarily last month after comments at a meeting in Window Rock indicated the developers might not receive a $2.5 million tax break. The Gallup Independent reported that Delegate Katherine Benally, chair of Navajo Council’s Resources and Development Committee, said the enterprise was no longer servicing the people.
“They’re there to make a profit,” the Independent quoted Benally as saying during a report by officials from the Navajo Nation Tax Commission. “They have moved away from their initial intent. We want to do away with all these tax breaks they’ve been enjoying. They are no longer there for the communities and the people.”
President Ben Shelly had said in July that the Navajo Nation Oil and Gas Co. would be exempt from the tribal gas excise tax until the company had recovered $2.5 million in building costs for the Twin Arrows gas station. The funds were needed to cover extending utility lines and building infrastructure.
However, Reuben Mike, vice president of the retail/wholesale business unit for Navajo Nation Oil and Gas, said on Wednesday that the project was still on track. Oil and Gas has had no officials indication that it will lose the incentive, which is already tribal law, he said.
“Building this store is good for the Navajo Nation and it’s good for Twin Arrows and the gaming enterprise itself,” Mike said. “It just wouldn’t make sense in any way, shape or form to not allow this project to move forward.”
Eric Betz can be reached at 556-2250 or firstname.lastname@example.org.